Weekly Newsletter 02/21/14
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Market Summary Weekly Breakout Report Top Breakout Choices Top 2nd Chances New Features Tip of the Week
Prior editions of this newsletter with our valuable Tips of the Week are available here.
 Weekly Commentary  

The NASDAQ Composite set a new 13 year high on Friday before profit taking caused the index to close lower for the day. Look for another period of consolidation now as doubts about the robustness of the economy emerge. Friday's housing news (existing home sales fell 5.1% in January, housing starts fell 16% month-on-month, mortgage applications dropped 4.1% from last week, home builder confidence fell) was disappointing but seen in the context of the bleak weather experienced across much of the  country, there is no reason to be alarmed.

NASDAQ Comp.

I've changed the format  of the newsletter to now include a complete list of the week's breakouts. As you can see, there were several big performances led by SSTK which broke out from our new Squeeze Play watchlist. Unfortunately you would have needed inside information to profit from it, as it gaped up 15% following the previous evening's earnings  report. Another strong performer was ACAD which broke  out from a CwH pattern with squeeze. More about that below.

 Weekly Breakout Report How confirmed breakouts performed this week
Breakouts for Week Beginning 2/17/14
B'out
Date
Symbol Base Squeeze B'Out
Price
B'out Day
Close
Last
Close
Current %
off BOP
*Gain at
Intraday High
02/21/14 USCR SQZ Y 24.15 24.79 24.79 2.65% 2.65%
02/21/14 UEIC SQZ Y 38.25 40.12 40.12 4.89% 4.89%
02/21/14 SSTK SQZ Y 83.16 98 98 17.85% 17.85%
02/21/14 ALNY SQZ Y 89.40 90.64 90.64 1.39% 1.39%
02/21/14 NLNK HTF Y 42.99 46.50 46.5 8.16% 8.16%
02/21/14 REGN CwH Y 334.83 334.98 334.98 0.04% 0.04%
02/21/14 NYNY CwH N 7.28 7.36 7.36 1.10% 1.1%
02/21/14 CSGP CwH Y 185.77 197.97 197.97 6.57% 6.57%
02/21/14 ACAD CwH Y 25.80 28.84 28.84 11.78% 11.78%
02/20/14 RBCN CwH N 11.77 12.28 12.23 3.91% 6.29%
02/20/14 NOA CwH Y 6.28 6.57 6.59 4.94% 7.17%
02/20/14 ICLR CwH Y 45.93 48.70 46.7 1.68% 7.71%
02/19/14 SUNE SQZ Y 15.58 15.76 16.54 6.16% 6.16%
02/19/14 CNX SQZ Y 39.30 39.79 39.69 0.99% 4.34%
02/18/14 PRLB SQZ Y 81.46 81.75 79.7 -2.16% 3.12%
02/18/14 OMER CwH Y 12.91 13.26 13.78 6.74% 12.32%
02/18/14 GA CwH Y 11.25 11.32 11.38 1.16% 1.96%
02/18/14 FANG CwH Y 59.84 61.02 63.99 6.94% 6.94%
 New Features this Week Additional Value that we added this week

Cup-with-Handle Squeeze-Off Price

A new column was added to the  cup with handle watchlist called "Squeeze-off Price". This  is the price that the stock must rise to for the squeeze to come off. In other words its the price that will move the upper Bollinger Band above the upper Keltner Channel. Usually, this price is above the CwH pivot, or breakout price, and leads to a stronger and more successful breakout.

This will become clearer when you read the next section.
 
This Week's Top Tip Tips for getting the most out of our site

"Squeeze Off" Cup-with-Handle Breakouts


My analysis of breakouts from a cup-with-handle (CwH) pattern over the last five years shows that breakouts are more likely to be confirmed  when the normal breakout occurs when the squeeze comes  off. This occurs more rarely, but when it does this leads to a successful breakout 75% of the time.

One would play these "Squeeze-Off" breakouts by acting when the intraday price hits the squeeze of price.

ACAD's breakout on Friday illustrates what I mean. In  this case, the squeeze-off price was 24.68 and lower than the pivot, so the trade could have been entered earlier the the usual  BoP giving a greater profit potential. Why was the squeeze-off price less than the pivot? That's because the squeeze started before the pivot was formed, which will not usually be the case.

ACAD Squeeze-off Breakout

GTN provides another example

GTN Squeeze-off breakout
 Market Summary Overview of market direction and industry rotation
Index Value Change Week Change YTD Trend
Dow 16103.3 -0.32% -2.86% Up
NASDAQ 4263.41 0.46% 2.08% Up
S&P 500 1836.25 -0.13% -0.66% Up
 Best Performing Index
1 Week 13 Weeks 26 Weeks Year-to-Date
NASDAQ Composite
0.46 %
NASDAQ Composite
6.81 %
NASDAQ Composite
16.56 %
NASDAQ Composite
2.08 %
 Best Performing Industry (by average technical score over each period)
1 Week 3 Weeks 13 Weeks 26 Weeks
Medical Practitioners Manufactured Housing Publishing - Newspapers Toy & Hobby Stores
 Most Improved Industry (by change in technical rank2)
Healthcare Information Services
+ 67
Copper
+ 151
Aluminum
+ 192
Aluminum
+ 195
Charts of each industry rank and performance over 12 months are available on the site

1The Market Signal is derived from our proprietary market model. The market model is described on the site.
2The site also shows industry rankings based on fundamentals, combined technical and fundamentals, and on price alone. The site also shows daily industry movements.

 Top Breakout Choices Stocks on our Cup-and-Handle list with best expected gain if they breakout
Category
Symbol
Company Name
Expected Gain1
Best Overall GST Gastar Exploration Inc 97
Top Technical GST Gastar Exploration Inc 97
Top Fundamental CMG Chipotle Mexican Grill, Inc. 30
Top Tech. & Fund. CMG Chipotle Mexican Grill, Inc. 30
1This is the gain predicted by our Expected Gain model if the stock breaks out. Expected Gains for all cup-and-handle stocks are published on our site.
 Top Second Chances Stocks that broke out this week and are still in buyable range
Category
Symbol
Company Name
Expected Gain1
Best Overall NYNY Empire Resorts Inc 100
Top Technical NYNY Empire Resorts Inc 100
Top Fundamental REGN Regeneron Pharmaceuticals Inc 40
Top Tech. & Fund. REGN Regeneron Pharmaceuticals Inc 40
1This is the gain predicted by our Expected Gain model after the stock has broken out which uses the volume on breakout as a predictive term. Because the model variance is +/- 38% the expectation can be negative.

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